U.S. Drought May Curtail Mississippi River Grain-Barge Shipping

Nov. 19 (Bloomberg) -- Water levels on the Mississippi
River may drop to historic lows next month in the Midwest,
delaying barges carrying everything from grains and coal to
steel and petroleum, after the worst U.S. drought in 56 years.

The waterway, the busiest in the U.S., may be too shallow
to navigate by Dec. 10 from St. Louis south about 180 miles (290
kilometers) to Cairo, Illinois, where the Mississippi meets the
Ohio River, the American Waterways Operators and Waterways
Council Inc. said in a Nov. 16 statement.

The drought that dried out farmland from Ohio to Nebraska
is expected to persist at least through February in most areas
and spread to Texas, according to the U.S. Climate Prediction
Center in College Park, Maryland. Barges on the Mississippi
handle about 60 percent of grain exports that enter the Gulf of
Mexico through New Orleans. The U.S. is the world’s largest
shipper of corn, wheat and soybeans.

“The Mississippi River is especially critical for the
agricultural community,” George Foster, the president of JB
Marine Service Inc. in St. Louis, said in a Nov. 16 statement.
“Closure of the Mississippi next month would mean that about
300 million bushels of agricultural product worth $2.3 billion
will be delayed reaching its destination.”

The number of barges moving south on the Mississippi fell
to 660 in the week ended Oct. 10, down from 691 a year earlier,
data from the U.S. Army Corp of Engineers show. A total of 488
barges moved north, down 26 percent from a year earlier.

Slow Movements

“The water from the Missouri will slow starting at the end
of this week, but there will be an increased flow from the upper
Mississippi that will alleviate it some,” Roy Huckabay, an
executive vice president for the Linn Group in Chicago, said in
an e-mail. “Look for slow movement with draft and tow
restrictions, but not total closure. There will be a heavier tug
of grain off the Ohio to the Gulf.”

Grain and oilseed inspected for export rose 0.9 percent to
87.982 million bushels in the week ended Nov. 15 from a week
earlier and down 6 percent from a year earlier, U.S. Department
of Agriculture data show.

Farmers, who will finish harvesting this month, will
produce 10.725 billion bushels of corn, 13 percent less than
last year, even after farmers planted the most acres since 1937,
the USDA said Aug. 10. The soybean crop may fall 4 percent to
2.971 billion bushels, the smallest in four years.

Rail-car deliveries to export terminals in the U.S. dropped
14 percent in the week ended Nov. 14, compared with the same
period a year earlier, USDA data show. Shipments in the last
four weeks are up 12 percent from the same period in 2011, the
government said.

More Trains

Cargill Inc., the largest closely held U.S. company, will
invest $6.4 million to build additional railroad tracks at its
grain elevator in Tuscola, Illinois. The company said Nov. 16
that it wants to expand access to the CSX Corp. railroad by the
spring of 2013 to allow for corn and soybean shipments to
terminals near New Orleans and to livestock and poultry
producers in the East and Southeast.

The Tuscola elevator has the capacity to store 7.5 million
bushels and already has access to rail lines operated by the
Union Pacific Corp. and the Canadian National Railway Co.

“Having access to load trains on the CSX gives the local
farmer customers additional access to the eastern livestock
markets, Cargill’s soybean processing plants in the southeast,
and the Gulf export markets,” Doug Childers, farm service group
leader for Cargill AgHorizon’s Central Illinois region, said in
the release.